Fixed Asset Manager (FAM) is a feature available in QuickBooks Desktop that computes depreciation of fixed assets based on the standards published by IRS. Here are the terminologies, depreciation methods, and predefined reports in Fixed Asset Manager to help you better manage your asset information.
Note: FAM is only available in QuickBooks Desktop Premier Accountant, Enterprise, and Enterprise Accountant. See steps for setting up Fixed Asset Manager.
Terminologies
| Terms | Description |
| Capitalization Limit | The dollar limit for fixed asset purchases to qualify as an asset instead of expense. It could range – as an example – from $200 to $20,000 per item purchased, depending on the size of the company. |
| Fixed Asset | Tangible items (i.e. machinery, furniture, computers, and equipment) owned by a company that have a useful life of greater than one year and whose value is greater than the company’s capitalization limit. |
| Depreciation | The decline in the price of an asset, attributable to deterioration, obsolescence, and impending retirement. Depreciation applies particularly to physical assets like equipment and structures. This loss in value needs to be tracked for tax purposes. |
| Disposal of Asset | This refers to removing an asset from the company either by theft, selling, or throwing it away. |
Depreciation Methods
| Depreciation Method | Description |
| Straight-Line Method (SL) | An easy method that allocates an equal amount of depreciation to each time period. |
| Declining-Balance Method (150% & 200% DB) | Allocates more depreciation expense to the early years of an asset’s life, when it is new; since there should be less down-time and fewer repairs in early years, the company should get more use out of the asset in the beginning of its life. |
| MACRS (Income Tax Method) | Uses the double-declining balance method, but you only take one-half year’s depreciation in the first year, and then you switch to the straight line method in the middle of the asset’s life, so a 5 year asset takes 6 years to depreciate. |
Note: QuickBooks articles have limited information about depreciation methods. For detailed discussion, see IRS Publication 946.
Predefined Reports
| Report | Purpose |
ACE Adjustment Calculation | To determine the total ACE adjustment needed to compute a tax return for a corporation. Assets are grouped by category and sorted by asset number within each group. |
| Amortization Schedule by General Ledger (G/L) Account Number | To see a summary of the activity of the amortized assets. Assets are grouped by general ledger account number and sorted by asset number within each group. |
| Amortization Schedule by User Defined (1 to 5) | To see a summary of the activity of the amortized assets, grouped by one user-defined classification. Assets are grouped by the user-defined field and sorted by asset number within each group. Note: There is a report for each user-defined field that you use. |
| AMT Adjustment Calculation | To print the necessary information for AMT depreciation adjustment reporting (Federal depreciation - AMT depreciation = AMT adjustment). Assets are grouped by category and sorted by asset number within each group. |
| Asset Disposition by Asset Sales Description | To see a summary of disposition information according to the sale description assigned to each asset. Assets are grouped by asset sale description and sorted by asset number within each group. |
| Asset, Basis and Disposal Detail Report | To print the asset details for each asset in the Asset and Disposal tabs that you see on-screen. |
| Assets Acquired in the Current Year | To see a summary of each asset purchased in the current year. Assets are grouped by general ledger account number and sorted by acquisition date within each group. |
| Depreciation Schedule by G/L Account Number | To see an activity summary for each asset, grouped by general ledger account number. Assets are sorted by acquisition date within each group. |
| Depreciation Schedule by User Defined (1 to 5) | To see an activity summary for each asset, grouped by one user-defined category. Assets are sorted by asset number within each group. Note: There is a report for each user-defined field that you use. |
| Lead Schedule by Category | To see an activity summary for each asset, grouped by category, in a traditional lead schedule format. Assets are sorted by asset number within each group. |
| Lead Schedule by G/L Asset Account | To see an activity summary for each asset, grouped by general ledger account number, in a traditional lead schedule format. Assets are sorted by asset number within each group. |
| Lead Schedule by Location | To see an activity summary for each asset, grouped by location, in a traditional lead schedule format. Assets are sorted by asset number within each group. |
| Lead Schedule by Tax Form and Property Description | To see an activity summary for each asset, grouped by tax form and property description, in a traditional lead schedule format. Assets are sorted by asset number within each group. |
| Monthly G/L Accumulated Account Summary | To see the total monthly cost additions and deletions and their beginning and ending balances. This report is grouped by general ledger asset account. Assets without assigned account numbers are grouped by "No Account Number." |
| Monthly G/L Asset Account Summary | To see the total monthly accumulated depreciation/amortization additions and deletions, and their beginning and ending balances. This report is grouped by General Ledger Accumulated Depreciation and Amortization account. Assets without assigned account numbers are grouped by "No Account Number." |
| Monthly G/L Expense Account Summary | To see the total monthly depreciation/amortization expense additions and deletions, and beginning and ending accumulated depreciation and amortization balances. This report is grouped by General Ledger Depreciation and Amortization Expense account. Assets without assigned account numbers are grouped by "No Account Number." Note: This report will appear from the list after expense data are entered. |
| Personal Property Schedule by Year of Acquisition | To see a summary of depreciation amounts for assets that you marked as personal property. Assets are grouped by the year each asset was placed in service, and sorted by acquisition date within each group. |
| Projection by Category | To see a five-year projection for each asset. Assets are grouped by category, and sorted by asset number within each group. |
| Remaining Basis Over Remaining Life Report | To identify assets that were not fully depreciated. Assets within this report are grouped and subtotaled by category. |